Correlation Between Glacier Bancorp and Emerson Electric

Can any of the company-specific risk be diversified away by investing in both Glacier Bancorp and Emerson Electric at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Glacier Bancorp and Emerson Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Glacier Bancorp and Emerson Electric, you can compare the effects of market volatilities on Glacier Bancorp and Emerson Electric and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Glacier Bancorp with a short position of Emerson Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Glacier Bancorp and Emerson Electric.

Diversification Opportunities for Glacier Bancorp and Emerson Electric

0.86

Correlation Coefficient

Glacier Bancorp  Emerson Electric

Very poor diversification

The 3 months correlation between Glacier and Emerson is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Glacier Bancorp and Emerson Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerson Electric and Glacier Bancorp is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Glacier Bancorp are associated (or correlated) with Emerson Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerson Electric has no effect on the direction of Glacier Bancorp i.e., Glacier Bancorp and Emerson Electric go up and down completely randomly.

Pair Corralation between Glacier Bancorp and Emerson Electric

Given the investment horizon of 90 days Glacier Bancorp is expected to under-perform the Emerson Electric. But the stock apears to be less risky and, when comparing its historical volatility, Glacier Bancorp is 1.02 times less risky than Emerson Electric. The stock trades about -0.1 of its potential returns per unit of risk. The Emerson Electric is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest  12,357  in Emerson Electric on December 20, 2024 and sell it today you would lose (1,118) from holding Emerson Electric or give up 9.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Glacier Bancorp  vs.  Emerson Electric

Glacier Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Glacier Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Emerson Electric

Risk-Adjusted Performance

Very Weak

Over the last 90 days Emerson Electric has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest abnormal performance, the Stock's primary indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Glacier Bancorp and Emerson Electric

The main advantage of trading using opposite Glacier Bancorp and Emerson Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Glacier Bancorp position performs unexpectedly, Emerson Electric can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Emerson Electric will offset losses from the drop in Emerson Electric's long position.

The idea behind Glacier Bancorp and Emerson Electric pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.